Labor knives out against CFMEU: workers’ rights on the chopping block

The hypocrisy is as breathtaking as it is predictable. Federal workplace relations minister Tony Burke fronted the media last week, to declare government support for a court-appointed administrator with dictatorial powers taking over the construction division of the CFMEU. Pretty much the first words out of Burke’s mouth were: “The number one job of any union and its officials is to look after its members”.

At that point, if there was any justice in this world, Burke should have been struck by lightning, struck dumb for seven years, and then swallowed as the earth opened up beneath him.

Burke is the product of the Labor factional machine aligned with notorious Shop, Distributive and Allied union. The entire business model of the SDA, for decades, has been making deals with major retail companies which deliberately undercut the supposed legal minimums in the Retail Award. On a conservative estimate in 2016, Coles alone had been pocketing $70 million per year from these arrangements. Multiply by several decades and a dozen or more giant retailers, and we’re talking billions of dollars—deliberately stolen from workers, with the active participation of Burke’s mates the SDA.

And yet Burke wasn’t struck dumb, or struck by lightning. Instead, he was bringing out the big stick against the main union in the construction industry, the CFMEU. The federal government will be supporting a Federal Court application to install an administrator over the union, or large parts of it, under section 323 of the Fair Work (Registered Organisations) Act.

According to Burke, this is “the toughest action that can be taken” against a union under this country’s industrial laws. He’s not wrong.

Section 323 of the FW(RO) Act would make many dictators blush: there appear to be literally no limits to the powers of a court-appointed administrator can wield over a union following a successful application to the Federal Court. And the government will make sure that the application is successful—to the extent that it will amend this already-draconian law when parliament sits again in mid-August if the CFMEU’s legal team manage to slow things down in court.

A snapshot of the union

Full disclosure. I joined the CFMEU when I started work on Victorian construction sites in 1999, and although I left the industry in 2017 I kept my CFMEU ticket for a couple of years after that. It never seemed the right time to leave a union that was under permanent siege for the supposed crime of doing what few other unions in this country have—holding its ground as an effective industrial force.

One of my payslips from 2016 shows the result of a week’s work: $51.60 an hour casual rate, three ten-hour days, three eights including a Saturday and a Sunday. All overtime at double time, plus travel, meal and site allowances. Gross pay was $4,098, or $2,710 for the week, after tax.

I worked alongside plenty of refugees from formerly well-paid blue-collar industries—manufacturing, the docks, meatworks, there was even a fully qualified licensed aircraft engineer who had doubled his income by landing a job on a unionised site. All of us knew that the only reason we could get this money, and the dignity and opportunity that comes with it, was the strength of the union.

And on the best sites, being in the union was about much more than the money. Hearing from Builders Labourers’ Federation veterans about the battles and outrageous stories of the past. Going to the city rallies that could bring Melbourne to a standstill. Finding ways to push back against a push-push-push foreman, and to get around the worker he was trying to bully. At its best, being in the CFMEU was about dignity, and pride in being part of a force that was successfully holding its ground against the bosses and their stooges and useful idiots like Tony Burke.

No-one doubted there was corruption around—plenty of the large contractors had mafia connections of different sorts, after all. But we’d laugh off the accusations of widespread criminality.

One of my last jobs was a new building at the money factory in Craigieburn, in the northern suburbs of Melbourne. All of us got a police check, there was a detailed security policy, photos were prohibited on site and we were all sworn to secrecy about the layout of the job.

This was at a time when Note Printing Australia, a wholly owned subsidiary of the Reserve Bank, was in the news for making massive corrupt payments to secure contracts from various governments. One of my fellow labourers at the induction had us in stitches. “So let me get this right” he’d say, “the lead contractor is the Reserve Bank, who are pretty much the biggest crims in the country. The mafia is running the formwork on site. But we’re the ones who have to be kept under surveillance? Classic.”

In 2014, I sat in on a couple of sessions of the Tony Abbott’s Royal Commission against the construction unions, headed by Dyson Heydon. This inquiry was launched in a blaze of allegations about crime in the construction industry and especially in the CFMEU.

It was a farce. In one session, sweeping accusations of criminal associations from Victoria’s assistant commissioner of police turned out to be based entirely on a single, discredited article in the Herald Sun.

In another session, the boss of a company whose negligence on safety had led to a worker being killed spent hours in the witness stand. He was allowed to avoid any questions about the worker's death, or about the sham subcontracting arrangement which meant there was no insurance payout to the dead worker’s family. Instead, the sole focus of the inquiry was making bullshit allegations against the CFMEU for taking steps to try and clean the site up.

The most substantial charge arising from the Heydon royal commission was the outrageous criminal charge of blackmail, carrying a maximum penalty of 15 years jail, that was levelled against John Setka and his then deputy Shaun Reardon. This was for allegedly making an industrial threat (cutting concrete supplies) in the course of an industrial dispute against a blatant union-busting attempt by Daniel Grollo’s Grocon corporation. The case collapsed, symptomatic of the Royal Commission’s failure to come up with anything much of substance, at the same time as it ignored the widespread crimes of employers against their workers that the commission brought to light.

Then and now

For anyone acquainted with this history, most of the media allegations against the CFMEU will sound familiar. There are attempts to paint legitimate industrial tactics—such as insisting that head contractors ensure the CFMEU rate is paid by all contractors on a job—as criminal activity. And there’s a lot of “guilt by association”—portraying the CFMEU is a criminal organisation because the union signs off on enterprise agreements with employers with alleged criminal associations.

However, not all the recent allegations can be so easily dismissed. Even if 90 percent of the media reporting is the same old bullshit, the rest should not be simply discounted.

For instance, no-one to my knowledge has offered an explanation of what NSW state secretary Darren Greenfield thought he was doing, when a construction company boss apparently slid $5000 in cash to him under a table in his union office.

We can’t know for sure that the cash demanded by a self-styled construction industry “fixer” would have gone to officials of the Victorian CFMEU as he claimed. But the fact that the guy is an associate of celebrity underworld figure Mick Gatto, who is a public and close friend of Setka, is one reason not to dismiss the allegation out of hand.

Some of the most serious allegations involve a former Hells Angel president, along with figures linked to the Finks, Rebels, and Comancheros bikie gangs, being handed CFMEU delegate positions. I’ve been out of the industry for seven years, and it’s not like I have any special knowledge. But asking around, it’s disturbingly easy to find credible, first-hand accounts of people with zero industry experience, and with bikie or criminal links, being parachuted into union roles in recent years. There’s been no public accounting for the more than twenty “delegates and officials” who have reportedly been stood down by the Victorian branch in recent days, following allegations of criminal links.

It’s undoubtedly a positive thing that people who have fallen foul of the law, for whatever reason, get a chance to start again in a well-paid, unionised job. I’ve had plenty of workmates with a story along these lines. But that’s a very different thing to organised criminal outfits getting any sort of a foothold in the union.

One understandable reaction to the allegations is, “who cares?”. The government, their mates in the SDA, the corporations—they’re all up to their ears in insider dealing, standover tactics, and illegal practices such as wholesale wage theft. Major builders like Lend Lease try to rip off $260 million in alleged tax fraud, and its barely news. Bikie gangs are amateur hour by comparison.

However, there are a series of reasons why anyone concerned with the fate of the CFMEU, and with the union movement in general, should be totally opposed to corruption, and should see any mutually beneficial arrangement with criminal gangs as a red line.

First, any of these practices give a massive free kick for every anti-union shitbag in the country.

Back in the 1980s, the militant Builders Labourers’ Federation was deregistered by the Hawke Labor government. The real reason was because the BLF kept fighting for and winning better wages and conditions, against the Labor policy of class collaboration and tame-cat unions. But the fact that Victorian BLF secretary Norm Gallagher had accepted gifts from employers for his holiday shack at McLoughlin’s Beach gave the attacks on the union a huge propaganda boost. Just because our enemy is looking for an excuse, doesn’t mean we should give them one.

Second, if officials or organisers are prepared to take cash to swing work to particular companies, it’s only a short step to taking cash to overlook enforcement of conditions for particular builders or contractors. From selling an enterprise agreement for cash, to selling out your members for cash, is not a long road to travel.

Third, once criminal gangs are established in a union structure, they can be very hard to dislodge. The history of unionism in the United States has many cases where gangster elements are invited in by a union leadership—often to fend off the bosses’ hired thugs during a strike, or as muscle in an internal battle. But whatever the reason, once they’re in, it’s too easy for the gangsters to take over. There’s plenty of corrupt, mafia-infested history in various US unions that demonstrate the results.

In this country, famously, gangsters had control of the NSW branch of the BLF in the 1940s and 1950s. It took a decade of difficult rank and file struggle, involving plenty of physical brawls as well as job-level and branch-level organising, for a reform ticket to finally dislodge them and win control in 1962.

Finally, the whole point of a bikie gang or criminal syndicate is the mutual benefit of those involved. The rest of the world, pretty much, can go to hell. Unions at their best are the exact opposite of this. As well as applying collective strength in the workplace to lift every worker, a decent union also works to extend solidarity to workers far beyond the workplace.

This is in recognition of one of the basic facts of working-class life and struggle: that a victory or defeat for one group of workers, and for people resisting the capitalist system anywhere, is a victory or defeat for us all. This has nothing in common with the ethos of a bikie gang, who share the ethos of capitalism—that pretty much everything is for sale, for the right price. Criminal gangs of any sort are parasitical and thoroughly capitalist organisations. They should not be allowed any place in a union.

How did it come to this?

Even if we choose to believe (against all odds) that any problems have now been fully identified, and entirely rectified—whether by the CFMEU national office taking control of Victoria, by John Setka standing down, by an unspecified number of delegates or officials being stood down, by the introduction of a new code of conduct for delegates, and by the frank admission of CFMEU national secretary Zach Smith that some of the media allegations “are deeply worrying and warrant investigation”—there is a question to answer about how this situation arose. Without this knowledge, how can we address the root of the problem?

Obviously, the more democratic a union is, the more full of life and fight, the higher the level of member engagement and the more regular the elections for delegates, the harder it is for crooked, corrupt or anti working class elements to get a look in.

Some commentators have blamed the situation in the CFMEU on the recent abolition of the Australian Building and Construction Commission, the anti-union taskforce which has extracted millions of dollars in fines out of the union since 2005.

In fact, the opposite is the case. Democracy in our unions has many enemies. Number one is the politicians, Liberal and Labor, who have squeezed the life out of industrial action in this country.

Industrial action, taken regularly, is the most powerful antidote to disengagement and lack of democracy in any union. When I started in the industry, different sorts of stoppages—often over safety, or to bring an underpaying subcontractor into line—were pretty commonplace at a job level.

In theory, many of these short stoppages could have led to prosecution from the main builder. But given that it would take years for a case to wind through the courts, during which the CFMEU could play merry havoc with a company’s construction schedule, most builders opted not to challenge the union, and prosecutions were rare.

Even back then, shop stewards only rarely faced election at a job level in my experience. But the fact of regular meetings, sometimes more than once in a week, with a real prospect of stopping work, meant that there were serious expectations of shop stewards. There were occasional rows at branch meetings when members complained about a slack one. Democracy was far from complete, but it was functional.

This changed significantly with the introduction of the ABCC in 2005. All of a sudden there was a government body which could, and did, sue the union over even minor stoppages. A quarter of a million dollars for a 10-minute delay to a concrete pour in Footscray. $6 million in total for the epic Grocon dispute of 2012 and its aftermath. $19 million in total from 2016. Short on-site stoppages became potentially very expensive for the union, and therefore much rarer.

One of the casualties was the finishing trades, especially plastering and floor laying. The previous union practice of stopping the whole job when a plastering contractor underpaid their workforce could attract massive fines, and the hard work of actually organising the finishing trades was never pursued. Within a few weeks of the ABCC being introduced in October 2005, the finishing trades were well on the way to becoming a basket case.

Another casualty was democracy, though this took much longer to play out.

One factor contributing to the erosion of democracy was fewer strikes. This occurred at a job level, and also across the industry. The Grocon dispute in 2012 was a major event in the CBD of Melbourne. But the last major set-piece battle in the Victorian industry to win new conditions was nearly a quarter of a century ago, in 2000, when the combined building unions won the fixed calendar of rostered days off and lock down weekends as part of the 36-hour week campaign. Fewer strikes mean a less engaged membership, especially over time.

Another factor was that, unable to call snap strikes or even talk about an industrial campaign without the threat of steep fines, more of the organising and decision-making went further behind closed doors. There’s nothing illegal about sudden, super-rigorous enforcement of safety rules. But it usually happens with a lot less member involvement discussion than the sort of stop-works that were commonplace before 2005.

And under an increasingly strict legal siege, it’s no surprise to see a siege mentality develop and intensify: any internal dissent can be claimed to be aiding the enemy outside the walls.

So the legal repression—the ABCC from 2005 onwards, the royal commission from 2014, the charges coming out of that which stretched to 2017—all helped to create the environment in which the upper levels of the union leadership could become more and more detached from the rank and file.

The death of John Cummins in 2006 severed one of the few remaining links to a more political past. The last secretary of the BLF, Cummins knew how to organise, knew the value of drawing in activists and rank and file members, and ran plenty of effective disputes. He supported many worthwhile industrial and political projects—for instance his role in supporting the MUA dispute in 1998, helping anti-uranium activists address site meetings during the campaign against the Jabiluka uranium mine, and helping lead a workers march to the S11 anti-corporate blockade in 2000.

In 2012, John Setka succeeded Bill Oliver to become Victorian state secretary. Though Setka had worked closely with Cummins, he never shared Cummins’ positive attitude to the left, or to systematic organising. The siege mentality in the CFMEU office seems to have intensified since 2019, when Setka was convicted of domestic abuse. The merest hint of disloyalty was sufficient for a series of union stalwarts to be driven out, with Setka’s long time deputy Shaun Reardon the most high-profile example.

I’m not qualified to write the history of exactly how and when organised crime started to get a toehold in the CFMEU. But the long-term deterioration in democratic norms within the union is what meant it could get in without visible challenge, until the current crisis.

Alternatives

A siege mentality and the slow erosion of everyday democracy is one possible response to a siege. And it’s clearly the course taken by Setka, which has laid the basis for the current crisis. But it’s far from the only possible approach.

An approach of strengthening rank and file democracy and control, rather than weakening it, is much more difficult. Such an approach has been anathema to the mainstream of the Australian union movement since Labor and the ACTU imposed the Accord in the 1980s, which involved clamping down on workplace union democracy as part of clamping down in industrial action. So to implement such an approach would run into all sorts of difficulties, most notably the Labor Party.

But it would have every chance of being more successful, both in the difficult work of organising the finishing trades, in preventing the encroachment of organised crime into the union, and in laying a basis for dealing with the current crisis.

It’s not hard to dream up a list of things that could be done to reestablish democratic norms, drive any organised crime figures out of union positions, and reassert member control over the union. For starters, it’d be possible to remove any shop steward delegate who has no industry experience. The union could mandate elections for every delegate once the daily workforce gets past a few dozen, and repeat the election every few months.

It’d be possible to have full transparency with the entire membership about who has been removed from what position and why, and even to have hearings available to the whole membership into allegations of corruption or organised criminal involvement.

Perhaps most importantly, it’d be possible to organise a program of organising and industrial action to ensure the union rate is paid to all workers on every job, starting with the finishing trades.

Of course, all of this is just a wish list if there are no forces to carry it out. But we can be sure that none of this is going to happen from a court-appointed administrator. Which is why socialists and other principled unionists oppose state intervention into our unions, including the CFMEU. State administration is the ultimate undemocratic move, it is no way to deal with a problem that is intertwined with an erosion of democracy in the first place.

The outcome of state intervention into a union, as much as any struggle, is determined in large part by who is organised. Some of the most famous cases are from the United States.

In the late 1980s, the federal government moved to impose state administration over the Teamsters Union, whose leadership at that time was totally intertwined with the mafia. Extensive rank and file networks in the union successfully campaigned against state administration. Instead, they won a supervised ballot in 1992, in which reformer Ron Carey was elected, who went on to lead a historic strike of 185,000 teamsters in 1997.

Similarly, when a massive corruption scandal in the United Auto Workers union led to a court-ordered ballot in 2021, the long history of reform groups in the UAW contributed to a victory for Shawn Fain, who led the historic strike in the US auto industry last year.

Contrast this with the course of events in the Australian Health Services Union in 2012, the only previous occasion in which section 323 of the Registered Organisations Act has been invoked. While the corrupt cabal around former leaders Kathy Jackson and Craig Thomson were pushed out, the rank and file are still left with a right-wing, industrially passive leadership.

Of course, none of these examples reflect the circumstances facing CFMEU members today. But they do illustrate the key independent variable—rank and file organisation.

It’s far from clear where all the cards will fall in this case. While the federal government has said it has no intention of cancelling enterprise agreements, the Fair Work Ombudsman—which has inherited much of the role of the former ABCC—has launched an investigation of its own.

The Fair Work Act has various draconian anti-union clauses that prohibit “coercion” or unprotected industrial action to secure an enterprise agreement. It’s not ruled out that action by the Fair Work Ombudsman, in concert with a government-appointed administrator, could result in agreements being terminated. This would mean the wages and conditions gained by many construction workers coming under serious attack.

This is especially the case in civil infrastructure, where the CFMEU has been winning ground from the Australian Workers Union in Victoria and more recently in Queensland. CFMEU enterprise agreements give far better wages and conditions than AWU agreements, leading to howls of outrage from major Queensland-based construction companies.

The media clearly have plenty more material. Much of it will be the same old right-wing bullshit, no doubt. But some of it (based on recent form) may well be damning. Every Labor apparatchik, aligned with the SDA or otherwise, will be rejoicing and sharpening their knives: no doubt many will be keen to use the current crisis to reshape the union into a weaker, more compliant organisation. Construction workers have a long battle ahead to build the forces that can win their union back.